Uber adds tipping feature, matching Lyft

On Tuesday, Uber Technologies Inc. will, for the first time, allow drivers to collect tips through the Uber smartphone app.
USA TODAY

A driver for Uber Technologies Inc., arrives at an authorized customer pick up area at Seattle-Tacoma International Airport, in Seattle. A federal judge in Seattle on Tuesday, April 4, 2017, temporarily blocked the city's first-in-the-nation law allowing drivers of ride-hailing companies such as Uber and Lyft to unionize over pay and working conditions(Photo: Ted S. Warren, AP)

SAN FRANCISCO — Uber is adding a tipping option to its ride-hailing service, a feature that has long been a part of rival Lyft and something Uber drivers have been requesting for years.

The new feature debuts in Seattle, Minneapolis and Houston on Tuesday, with more cities to roll out over the next few weeks and every market covered by the end of July, according to an email Uber sent drivers signed by head of U.S. operations Rachel Holt and head of driver experience Aaron Schildkrout.

"We've heard you," the note reads. "You've told us what you want, and now it's time we step up and give you the driving experience you deserve, because simply put, Uber wouldn't exist without you."

Uber is committing to what it calls "180 days of change (and beyond)," which will also include driver-focused updates such as a shorter cancellation window (the driver gets a fee if you cancel your ride after more than 2 minutes, down from 5 minutes); a small fee for waiting for a passenger starting at the 2-minute mark; and a new $2 charge is being added to Teen Account trips.

Tips will be voluntary, and do not impact how a driver might rate a passenger because the driver's rating is required before the tipping request is sent out, according to both Uber and Lyft spokespeople.

The news comes as Uber begins implementing 47 recommendations from a three-and-a-half month internal investigation led by former U.S. attorney general Eric Holder, which were revealed to Uber staff last week.

But those findings were all focused on addressing Uber's myriad corporate issues, which range from accusations of fostering a sexist and cut-throat work environment to promoting a culture where only workaholics following CEO Travis Kalanick's mandate were rewarded.

Uber will now allowing passengers to tip drivers after the fact, a feature that has long been popular among Lyft drivers.(Photo: Uber)

Uber's driver relationship issue have persisted for some time independent of its workplace problems. Uber's former president Jeff Jones, who left the company in the wake of ex-engineer Susan Fowler's explosive allegations about sexism at the ride-hailing company, was brought on board specifically to address its relationship with drivers, to little avail.

On Tuesday, Uber co-founder Garrett Camp posted an introspective essay on Medium in which he lamented how the company went off its tracks and specifically spotlighted its relationship with its street-level contractors.

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"A friend recently asked me, 'What went wrong?' and the answer is that we had not listened well enough to those who got us here… our team and especially our drivers," wrote Camp, who remains a powerful figure on Uber's board but otherwise has not been involved in the company's day to day operations for some time.

CEO Travis Kalanick is on an indefinite leave of absence. When he returns, he'll likely have a completely new management team.(Photo: Uber Technologies.)

In a recent report on Uber drivers called "The Faceless Boss," NPR reporter Aarti Shahani surveyed 1,000 drivers and found that the company's drivers had a few overarching complaints.

"For one, they felt this was a weird job because it's the only one most have had were they literally can't reach the person in charge," Shahani says.

The other big issues were not being sure what they would make on each ride, and being tracked while on duty via the Uber app. Shahani says that "many drivers fell like Uber controls them in ways that are odd, and they don't like it."

Regardless of Uber's urgent need to change both its internal culture and its tarnished brand image, the new tipping option may have been inevitable.

In April, the New York City Taxi and Limousine Commission granted a petition by the city's Independent Drivers Guild — a union affiliate representing 50,000 app-based drivers — to create a rule that would require ride-hailing services to add in-app tipping, a move that could ultimately have had a ripple effect nationwide.

On Tuesday, the Guild celebrated Uber's move as "an important win for drivers" given that "cuts to driver pay across the ride-hail industry have made tipping income more important than ever,"
said Jim Conigliaro Jr., IDG founder and Machinists Union official.

Uber executives had long argued that the no-muss aspect of its non-tipping approach — get in a car, ride to your destination, and get out — was one of the most popular aspects of its service with riders.

A self-driving Uber car drives down River Road on Pittsburgh's north side.(Photo: Gene J. Puskar, AP)

Much as with Lyft's long-time tipping option, Uber passengers can use the new feature to reward a particularly memorable ride after the fact. On Monday, Lyft announced it had distributed $250 million in tips to its drivers.

Uber's issues with drivers reached a low point in February, when Kalanick was caught berating a driver who was complaining about fare changes on a dashcam video.

What's more, Uber's tenuous business model — analysts suspect current ride-hailing prices are being kept artificially low with subsidies — is hampered by having to pay the humans at the wheel. Kalanick has pushed his company into the fierce race for self-driving car technology specifically so he could eliminate the driver.

“The reason Uber could be expensive is you’re paying for the other dude in the car," Kalanick said at a Code Conference in 2014. "When there is no other dude in the car, the cost of taking an Uber anywhere is cheaper.”